^4I^^ 


/ 


EXPORT  DUTY  ON  RAW  COTTON, 


AND  FREE  TRADE  IN 


COTTON    FABRICS, 


THE  TRUE  POLICY  FOR  THE 


SOUTHERN  CONFEDERACY; 


CHARLESTON : 

PRINTED  BY.  A.  J.  BURKE,  40  BROAD-STREET.   . 
1861.   - 


AN 


EXPOUT  DUTY  ON  HAW  COTTON 

AND  FREE  TRADE  IX 

COTTON    FABRICS, 

THE  TRUE  POLICY  FOR  THE 

SOUTHERN  CONFEDERACY. 


CHARLESTON : 

PRINTED  BY.  A.  J.  BURKE,  40  BROAD-STREET. 
1861. 


Digitized  by  the  Internet  Archive 
in  2011  with  funding  from 
Duke  University  Libraries 


http://www.archive.org/details/exportdutyonrawc01char 


#3r 


Ax  Export  Duty  ox  Raw   Cottox,  axd  Free  Trade  ix 
CoTTOx  Fabrics,  the  True  Policy  for  the  Southerx 

COXFEDERACY. 


An  error,  which  has  been  suffered,  unchallenged,  to  gain 
upon  behef,  and  acquire  the  sanctity  of  a  principle,  in  the 
sacred  college  of  truth,  like  the  hypocrite  in  social  life, 
is  apt  to  exhibit  a  livelier  indignation  and  resent  more  vio- 
lently, any  approach  to  a  candid  scrutiny,  than  the  soul 
of  sincerity  itself.  Of  this  temper,  I  fear  to  be  the  pre- 
vailing notions  respecting  the  nature  and  operation^  of 
a  duty  on  exports,  considered  more  especially  in  its  rela- 
tions to  the  faculties  of  the  new  government  now  established 
under  a  Southern  Confederacy.  Since  the  time  of  the 
younger  Pitt,  when  the  principle  of  an  export  duty  on  "pig 
iron,"  was  stigmatised  in  the  debates  of  Parliament,  "as 
a  barbarism  in  finance,"  no  one  seems  to  have  been  disposed 
to  question  the  truth  of  the  dogma,  but  like  an  action  for 
a  "sum  certain,"  it  has  gone  "  by  default"  for  the  want  of  a 
plea,  without  even  a  "writ  of  inquiry."  And  the  judgment  has, 
with  singular  energy,  executed  itself  on  this  side  of  the  Atlan- 
tic by  a  negative  condemnation,  in  the  practice  of  the  Govern- 
ment from  its  origin.  The  fact,  however,  is  less  surprising,  and 
reflects  nothing  of  discredit  upon  the  public  intelligence,  when 
it  is  considered,  that  the  principles  of  finance  in  favor  Avith 
the  old  government,  looking  to  protection  rather  than 
revenue,  necessarily  excluded  from  theoretical  discussion,  or 
practical  exemplification,  any  system  for  raising  the  national 
revenue,  supposed  to  be  inconsistent  with  that  object.  And 
hence  the  utter  ignoring  of  any  other  method,  than  that  of  duties 
on  imports,  well  understood  in  its  efficiency  to  that  end.  The 
political  revolution,  however,  through  which  we  have  passed, 
would  fail  to  yield  its  most  substantial  benefits,  if  it  does  not 


'bring  with  it,  a  thorongli  determination  in  the  general  mind  t© 
go  back  to  first  principles,  in  all  that  relates  to  the  civil  organiza- 
tion, and  resolutely  to  consult  no  other  oracle  than  reason, 
guided  by  experience,  in  the  reconstructing  of  every  part  of 
the  administration.  It  is  impossible  that  so  great  and  radical 
a  change  in  our  external  relations,  should  not  create  a  neces- 
sity for  other  changes  as  signal,  in  the  internal  administration. 
And  it  is  my  purpose  in  the  following  observations  thrown  to- 
gether hastily,  though  not  without  some  reflection,  to  endeavor 
something,  towards  drawing  the  public  attention,  and  particu- 
larly the  notice  of  the  authorities  at  Montgomery,  to  a  prom- 
inent change  in  the  system  of  revenue,  which,  in  my  judgment, 
is  at  this  time  urgently  demanded  by  every  principle  of 
domestic  economy,  commercial  prosperity,  and  foreign  policy. 

Duties  on  imports  have  so  long  been  regarded  as  the  only 
practicable  method  of  providing  the  public  revenue,  that  a 
proposition  to  repeal  them,  will  in  the  minds  of  most  people, 
imply  a  stoppage  of  supplies  altogether,  at  the  only  source  capa- 
ble of  yielding  them.  In  all  discussions  hitherto,  none  but 
the  direct  taxation  men,  have  ever  proposed  to  abolish  im- 
port duties  altogether.  The  only  question  has  been,  whether 
the  principle  of  revenue,  or  protection,  should  govern  the 
scale.  Perhaps  in  the  old  Union,  encumbered  as  it  was  with 
an  immense  amount  of  manufacturing  capital,  which  had  been 
put  upon  its  legs  before  it  could  walk,  and  required  to  be  pre- 
served from  falling,  such  an  idea  would  have  been,  perhaps, 
justly  regarded  as  impracticable,  and  hence  received  no  atten- 
tion. But  very  different  is  the  situation  of  the  new  Confedera- 
cy. With  no  excrescences  of  this  nature  in  the  body  politic,  to 
compel  a  departure  from  the  principles  of  sound  economy, 
and  entering  upon  a  national  existence  in  some  respects  pecu- 
liar and  unprecedented,  it  is  the  very  time  and  place  for  a 
careful  scrutiny, into  every  thing  pertaining  to  the  future  policy 
of  the  new  government,  taking  nothing  upon  trust  from  the 
old. 

Indeed,  the  necessity  will  meet  the  Southern  statesman  at 
every  step  in  framing  the  new  order  of  things  to  recur  to  first 
principles,  rejecting  old  and  adopting  new  methods  with  equal 
facility,  according  as  they  shall  be  suitable  to  our  altered  politic 


eal  relations.  I  am  happy  in  believing,  moreover,  that  the  peo- 
ple of  the  Southern  Confederacy  are  at  this  juncture  pecuharly 
fortunate  in  the  character  of  the  men,  charged  with  the  pow- 
ers of  government  at  Montgomery.  Selected  as  they  were, 
by  Conventions  of  the  respective  States,  and  at  a  crisis  of 
affairs  which  brought  into  requisition  the  best  talents  in  the 
country,  it  is  not  too  much  to  expect,  that  they  will  be  fully 
equal  to  the  bold  and  delicate  task,  of  revising  or  reversing 
old  systems,  retaining  what  may  be  useful  or  appropriate, 
but  discarding  with  relentless  severity  every  thing  mischiev- 
ous or  flilse,  however  consecrated  under  the  forms  of  long 
established  usage.  In  this  confidence,  I  deem  it  not  inappro- 
priate to  throw  together,  some  reflections  upon  a  subject  that, 
at  the  outset,  must  occupy  the  attention  of  the  new  govern- 
ment, as  one  of  paramount  importance.  Taxation  is  a  topic 
which  has  at  all  times,  and  ever  must  continue  to  occupy, 
principally,  the  thoughts  of  every  people ;  as  it  is  chiefly 
through  that  part  of  the  machinery  of  government, 'that  the 
citizen  is  affected  for  good  or  evil,  and  the  operation  of  which, 
goes  far  to  determine  his  status  in  the  scale  of  civil  liberty. 

Particularly  interesting  is  the  subject  to  us  at  this  time, 
entering  as  we  are  upon  a  new  national  career,  with  a  tabula 
rasa,  to  inscribe  what  characters  we  please,  and  terribly  admon- 
ished by  experience  that  it  is  a  sea  abounding  in  perils, 
and  demanding  the  best  skill  of  the  navigator,  to  keep 
clear  of  disaster.  Without  pretending  to  be  a  Pahnurus, 
I  shall  proceed  with  a  very  shallow  line  and  plummet  to  take 
some  of  the  soundings  along  the  shore. 

It  is  estimated  that  the  newgovernment,  comprising  the  eight 
cotton  States,  (Arkansas  included,)  will  need  twenty  millions  of 
revenue  to  carry  on  its  operations.  The  question  is,  how  shall 
this  be  raised  ?  The  government  must  have  it,  and  somebody 
must  pay  it.  There  are  three  alternatives,  (laying  out  of  view 
direct  taxation.)  Shall  we  continue  the  old  system  of  exporting 
duty  free,  and  laying  a  tax  upon  imports  ?  or  shall  we  lay  a 
duty  on  exports,  additional  to  the  duties  now  subsisting  on 
imports  ?  or  shall  we  adopt  the  only  other  alternative,  of 
substituting  an  export  duty  upon  raw  cotton,  for  the  existing 
import  duties  upon  the   cotton  fabrics?     In  my  judgment, 


6 

tlie  last  is  the  scheme,  which  can  bo  demonstrated  to  be  the 
only  one  founded  in  true  revenue  and  commercial  principles^ 
and  if  adopted  as  the  fiscal  policy  of  the  Southern  Confed- 
eracy, will  be  speedily  followed  by  the  most  striking  results, 
as  well  in  its  economical  efficiency,  as  in  its  effects  upon  the 
general  commerce  of  the  country.  In  this  belief,  I  propose 
to  show — 

First  :    That  an  export  duty,  not  excessive,  say  one  cent 
per  pound  upon  the  cotton  crop  exported,  yielding  the  twenty- 
millions  needed  by  the  government^  will  fall  principally,  if 
not  wholly,  upon  the  consumer  of  the  fabrics,  and  not  the 
producer  of  the  raw  material. 

Secondly:  That  nine-tenths  of  a  revenue  so  raised,  will  fall 
upon  foreign  nations,  one-tenth  only  being  paid  by  our  own 
citizens. 

Thirdly  :  That  the  tenth  part  falling  upon  our  own  citizens, 
will  be  supplied,  by  paying  into  the  treasury,  only  two  dollars, 
instead  of  the  twenty-four  now  levied  upon  the  domestic  con- 
sumption of  all  imported  articles  of  cotton  fabric. 

And,  Fourthly  :  The  commercial  effects  of  such  a  policy, 
adopted  by  the  Southern  Confederacy,  would  be,  speedily  to 
abolish  the  whole  system  of  import  duties  in  all  the  States, 
and  throw  open  the  entire  American  market  to  free  trade  in 
cotton  manufactures,  the  object  of  a  forty  years  successless 
struggle  in  the  Union. 

The  first  question  is,  who  will  pay  the  tax  ?  All  writers, 
a,nd,  I  believe,  all  intelligent  commercial  men  agree,  that  a 
tax  laid  upon  any  article  of  commerce,  must  sooner  or  later, 
settle  itself  in  one  of  three  ways — either  upon  the  producer, 
or  the  consumer,  or  it  must  distribute  itself  between  the  two. 
There  is  an  equal  concurrence  in  the  principle,  that  the  con- 
dition of  the  market  for  the  particular  commodity,  as  deter- 
mined by  the  relation  of  demand  and  supply,  of  the  article 
taxed,  will  in  great  measure,  if  not  altogether,  determine 
which  of  these  directions  the  tax  will  take.  If  the  consump- 
tion be  strong,  and  growing  upon  the  production,  it  is  conce- 
ded the  tax  will  settle  upon  the  consunier.  If,  on  the 
contrary,  the  production  be  in  excess,  and  the  demand  con- 
sequently feeble,  it  is  considered  equally  certain,  that  any 


addition  to  the  charges  would  fall  upon  the  producer.  Again,- 
in  a  third  state  of  the  market,  when  supply  and  demand  are 
pretty  Avell  adjusted,  neither  encroaching  upon  the  other, 
producing  Avhat  merchants  call  a  healthy  market,  of  uniform 
prices,  tending  strongly,  neither  downwards  or  upwards,  such 
a  tax  by  general  consent,  will  divide  itself  between  the  buyer 
and  seller,  in  proportions  certain  in  themselves,  but  not  posi- 
tively ascertainable,  b}"  any  method  of  analysis  yet  known  to 
political  economy.  It  may  be  safely  affirmed,  however,  that 
it  is  a  varying  proportion,  fluctuating  with  the  changes  in  the 
tone  of  the  market. 

If  these  be  acknowledged  principles,  then  the  question  in 
relation  to  the  export  duty  proposed,  resolves  itself  into  one 
of  simple  fact,  about  Avhich  the  whole  intelhgent  world  is 
capable  of  judging,  and  has,  and  is  daily,  in  every  form  of  expres- 
sion, declaring  its  testimony.  "Which  of  these  three  condi- 
tions, is,  the  actual,  and  normal  one  of  the  cotton  market  of  the 
world  ?  Every  merchant  knows.  Every  newspaper  report 
of  prices  current  declares  it.  The  cotton  spinning  associations,- 
and  the  cabinets  of  Europe  treating  the  fact  as  one  which  has 
assumed  the  magnitude  of  a  political  question,  all  proclaim,  that 
the  consumption  of  this  wonderful  staple,  is  not  only  now,  in 
advance  of  the  production,  but  the  growing  disparity  between 
the  two,  is  destroying  the  equality  of  commercial  values, 
and  threatening  universal  calamity. 

I  assume  then,  as  an  indisputable  fact,  that  the  condition  of 
the  cotton  market,  now  and  henceforward,  so  far  as  human  fore- 
sight can  penetrate  the  future,  is  such  as  will,  upon  ackno^vl- 
edged  principles,  governing  the  operationsof  trade,  throw  the 
duty  upon  the  consumer  :  provided,  however,  (and  this  brings 
us  to  the  qualification  contained  in  the  proposition,)  that  the' 
duty  laid  be  not  excessive.  Would  a  duty  of  one  cent  per 
pound  upon  raw  cotton  be  liable  to  this  objection  ?  It  could 
only  be  so  by  adding  so  largely  to  the  price  of  the  fabrics  as 
materially  to  curtail  consumption  ;  for  by  the  argument  it  is 
thrown  exclusively  upon  the  consumer.  Let  us  consider,  in 
a  general  way,  how  this  stands.  We  do  not  aim  at  arithmet- 
ical precision ;  general  truth  wiU  serve  for  the  illustration  of 


8 

the  principle.  I  will  engage,  however,  that  any  departure  from 
exactness  shall  be  against  the  argument. 

It  is  well  known,  that  a  pound  of  raw  cotton,  in  the  various 
processes  of  manufacture,  acquires  a  value,  from  three  times 
to  twenty  times  its  original  cost,  according  as  it  is  converted 
into  the  coarse  or  finer  fabrics.  One  cent  per  pound  upon 
the  raw  cotton,  being  about  nine  per  cent  of  its  present  value, 
would  enhance  the  price  of  a  fabric,  worth  thirty  three  cents 
to  the  pound,  not  more  than  three  per  cent.;  and  a  fabric 
worth  two  dollars  to  the  pound,  as  a  vast  variety  undoubtedly 
are,  would  not  be  enhanced  more  than  one-half  of  one  per 
cent  in  value.  All  articles  of  intermediate  value,  would  be 
enhanced  more  or  less,  according  to  the  position  they  might 
occupy  upon  the  scale,  between  these  extremes.  The  average 
increase  of  price,  upon  the  whole  mass  of  cotton  fabrics  of  all 
descriptions  consumed,  in  ths  markets  of  the  world,  would  not 
exceed  two  per  cent.,  about  the  mean  between  the  highest 
and  lowest  limit  above  stated.  The  question  here  occurs  : 
could  so  slight  an  advance  in  the  price  of  cotton  fabrics,  mate- 
rially check  a  consumption,  confessedly  vigorous  and  growing 
in  intensity,  so  as  to  curtail  in  any  appreciable  degree,  the 
demand  for  the  raw  material  ? 

This  question  will  be  better  answered  after  considering 
another,  viz  :  In  what  class  of  fabrics  would  this  advance  in 
the  price  be  most  likely  to  take  place — in  those  varieties 
denominated  luxuries,  or  in  the  coarser  descriptions  consumed 
by  the  poorer  classes  ?  For  it  is  an  admitted  principle  among 
economists,  whether  practiced  as  an  art  at  the  counter,  or 
delivered  in  speculation  from  the  chair,  that  articles  of  luxury 
will  bear  taxation  in  much  higher  degree  than  articles  of 
necessity,  without  checking  consumption.  The  reason  is 
plain.  The  cravings  of  fashion  and  caprice  are  as  importunate 
as  those  of  necessity.  The  difference  is,  that  in  the  one  case, 
there  is  abundance  of  means  to  gratify  them,  in  the  other  un- 
happily not  so.  Hence  the  addition  of  a  few  cents,  more  or 
less,  to  the  price  of  the  finer  fabrics,  calculated  as  they  are 
for  an  affluent  market,  is  but  little  felt,  and  not  regarded. 
Not  so  with  the  coarser  fabrics.  Such  articles  are,  to  a  great 
extent,  intended  for  a  market  of  narrow  means,  already  strained 


to  its  utmost  by  existing  prices,  any  addition  to  whicli  must 
of  course  be  met  by  the  contrivances  of  poverty,  for  econo- 
mising consumption.  The  question  recurs  :  to  v/hich  of  these 
classes  of  fabrics  will  the  tax  attach  itself.  Let  us  consider 
this  a  little  in  detail.  The  bulk  of  the  finer  cotton  fabrics 
range  from  twenty-five  to  thirty-seven  and  fifty  cents  a  yard, 
the  most  expensive  varieties  reaching  a  much  higher  value. 
The  finer  the  fabric  the  greater  number  of  yards,  as  a  general 
rule,  to  the  pound  weight.  The  number  of  yards  to  the 
pound  will  run  (keeping  within  average  limits,)  from  three  to 
ten ;  in  some  varieties,  less,  in  a  greater  number,  more.  Take 
an  article  Avorth  thirty-seven  cents  a  yard,  requiring,  as  most 
articles  of  this  quality  are  likely  to  do,  eight  yards  to  the 
pound  weight:  it  is  evident,  that  the  pound  of  cotton,  which 
has  been  converted  into  this  fabric,  has  assumed  a  value  of 
two  dollars  ninety-six  cents  ;  and  if  it  advances  no  more  in 
price  than  to  restore  the  one  cent  imposed  upon  the  original 
pound  of  raw  cotton  out  of  w^iich  it  was  manufactured,  the 
additional  cost  to  the  consumer  will  be  expressed  by  adding 
one  cent  to  every  two  dollars  ninety-six  cents  w^orth  of  the 
article  he  buys,  and  so  on  through  the  whole  scale  of  the 
great  variety  of  fabrics.  I  have  selected  this  instance  as  a 
medium  one,  for  the  purpose  of  illustration ;  but  we  will  take 
two  other  examples,  nearer  the  opposite  extremes  of  the 
scale.  For  instance,  fabrics  worth  eleven  cents  a  yard,  and 
requiring  three  yards  to  the  pound,  would  be  enhanced  in 
the  market  one-third  of  a  cent  a  yard,  or  one  cent  upon  the 
pound  value,  being  three  per  cent  upon  the  consumption. 
On  the  other  hand,  an  article  worth  fifty  cents  a  yard,  and 
running  ten,  as  some  do  fifteen  or  twenty  yards  to  the  pound 
weight,  it  is  manifest,  that  the  cent  imposed  upon  the  raw 
material  is  lost  in  the  attempt  to  trace  it,  and  resolves  into 
an  infinitesimal  quantity,  as  to  any  effect  it  can  have  upon 
price,  or  in  reducing  consumption. 

These  principles,  practically  understood  by  every  retail 
dealer,  in  cotton  fabrics  of  the  different  varieties,  what 
will  be  his  method  of  recovering  the  one  cent  per  pound 
from  his  customer,  the  consumer?  Will  he  commit  the- 
blunder  of  putting  any  part  of  the  tax,  small  as  it  is,  upon- 
2 


lo 

the  coarser  fabrics,  where  it  will  be  immediately  felt,  and 
to  that  extent  curtail  his  sales  in  them  ?  or  will  he  make 
the  class  of  finer  fabrics  bear  the  tax,  distributing  the  whole 
tax  among  the  varieties  that  Avill  not  feel  it,  and  thereby  pre- 
vent a  reduction  of  his  business  in  the  coarser  articles?  His 
economy  is  too  plain  to  be  mistaken.  And  this  developes  a 
feature  of  the  system,  by  no  means  the  least  valuable. 
No  system  of  fixed  taxes,  such  as  the  existing  tariff,  how- 
ever fiLiithfally  graduated,  and  discriminative  in  its  efforts, 
to  throw  upon  each  article,  just  so  much  tax  as  it  will  beary 
without  reducing  consumption,  (the  strictly  revenue  principle,) 
can  ever  do  more  in  practical  operation,  than  approximate  to 
its  own  principle.  The  difficulty  is  intrinsic.  The  scale  is 
inflexible,  the  ability  of  consumption  infinitely  and  perpetually 
variable.  The  means  adopted  to  effect  the  end,  are  as 
inadequate  and  intrinsically  unfit,  as  would  be  a  yard  or  an 
ell  for  the  measurement  of  a  running  fluid,  and  as  impossible 
to  be  exact,  as  to  establish  an  equation  between  a  given  and 
a  shifting  quantity.  Those  fiimiliar  with  the  details,  in  this 
branch  of  the  public  administration,  understand  the  truth  of 
this  perhaps  better  than  I  do.  It  is  admitted,  however,  by 
all  intelligent  statesmen,  that  the  chief,  if  not  the  only  test  of 
the  merit  of  any  scheme  of  finance,  is  the  degree  in  which,  in 
its  practical  results,  it  effectuates  this  principle.  If,  then, 
the  retail  merchant,  exercise  his  trade  with,  the  discriminating 
intelligence  above  supposed,  distributing  the  export  duty, 
upon  the  various  fabrics  he  sells  to  his  customers,  just  in  pro- 
portion as  he  perceives  will  meet  the  ability  and  willingness 
of  the  consumer,  have  we  not  here  a  tax  levying  itself,  upon 
a  self-adjusting  principle,  by  force  of  the  laws  governing  the 
operations  of  trade,  as  exactly  conformable  to  the  standard  of 
theory,  as  can  possibly  be  conceived?  Every  retail  merchant 
is  converted  into  a  tax  collector,  not  inexorably  levying  an 
inflexible  tax,  the  nature  of  all  fixed  scales,  but  making  it  his 
chief  stud}^,  as  it  is  his  interest,  and  the  very  art  of  his  trade, 
to  measure  the  exaction,  to  the  ability  of  the  tax  payer,  and 
accommodate  its  collection  to  his  convenience;  thus  realising 
the  perfect  standard  of  theory,  viz.,  a  variable  scale  of  duties, 
in  exact  sympathy  with  every  fluctuation  in  the  means  and 
ability  of  the  consumer. 


11 

We  are  now  prepared  to  answer  tlie  question  above  de^ 
ferred.  Will  a  direct  tax  of  two  per  cent  upon  the  consump- 
tion of  the  world,  shifting  itself,  as  we  have  seen  this  will 
inevitably  do,  from  all  articles  which  would  be  distressed  by 
the  additional  burden,  upon  those  descriptions,  which  Avould 
neither  be  materially  enhanced  in  market  price,  nor  with- 
drawn from  the  reach  of  the  affluence  that  consumes  them, 
be  excessive,  or  operate  such  a  reduction  of  the  consumption 
of  cotton  fabrics  in  the  aggregate,  as  to  react  sensibly  upon 
the  value  of  the  raw  material.  If  the  foregoing  facts  and 
reasoning  are  not  delusive,  the  question  is  already  answered. 

If,  then,  we  may  assume  it  as  reasonably  establislied,  that  the 
duty  in  question  will  shift  itself  upon  the  consumer,  our  second 
proposition,  that  nine-tenths  of  the  entire  revenue  levied  upon 
this  principle  will  fall  upon  foreigners,  and  the  remaining 
one-tenth  only  upon  our  citizens,  will  prove  itself  by  a 
very  simple  statement  of  facts.  It  is  estimated  that  the 
whole  cotton  crop  exported,  worth  in  the  raw  state  two 
'hundred  millions  of  dollars,  by  conversion  into  the  various 
fabrics,  acquires  an  increase  of  five  times  its  original  value, 
giving  an  aggregate  value  of  one  billion  of  dollars  in  the 
shape  of  manufactures  annually  consumed  in  the  markets  of 
the  world.  Of  this  enormous  amount,  not  more  than  one^ 
tenth,  as  near  as  can  be  computed,  comes  back  for  consump^ 
tion  into  the  States  (Arkansas  included)  composing  the 
SoutherQ  Confederacy,  making  an  import  of  one  hundred 
millions.  In  this  proportion,  then,  must  all  revenue  de- 
rived from  such  a  source,  divide  itself  as  between  the  citi- 
zens of  the  Confederacy  and  foreign  nations.  The  home 
consumers  pay  one-tenth  of  the  whole,  and  all  the  rest  of  the 
consuming  world  the  other  nine-tenths.  Two  per  cent,  upon 
the  whole  consumption,  foreign  and  domestic,  gives  exactly 
the  twenty  millions,  two  milHons  of  which  only  are  drawn 
from  our  own  citizens.  But  this  is  not  all  ;  the  tenth  part 
drawn  from  the  home  consumer  will  be  vastly  more  than 
restored  to  him  by  the  repeal  of  tiie  existing  duties  upon  the 
same  articles.  The  enormous  diHerence  between  twenty-four 
per  cent.,  the  existing  duty,  and  two  per  cent.,  the  effect  of 
the  export  duty,  will  be  the  measure  of  saving  upon  all  articles 


12 


of  consumption,  and  the  result  will  exhibit  the  singular  specta- 
cle, paradoxical  as  it  may  seem,  of  a  treasury  supplied,  over- 
flowing" with  revenue,  and  the  people  growing  richer  by 
every  act  of  contribution.  By  the  change  proposed,  it  is 
clear,  that  for  every  two  dollars  taken  from  the  citizen  by  the 
indirect  operation  of  the  export  duty,  twenty-four  will  be 
remitted  to  him,  now  exacted  directly  under  the  import 
system. 

The  commercial  effects  of  such  a  policy,  apart  from  its 
features,  as  a  scheme  of  finance,  would  soon  exhibit  themselves 
in  a  manner  not  less  striking.  The  opening  of  the  Southern 
ports  under  a  system  of  free  trade,  would  speedily  force  upon 
the  maritime  States  of  the  North  a  similar  policy.  They 
would  have  to  elect,  and  that  promptly,  between  an  entire 
loss  of  their  foreign  trade,  or  a  compliance  with  our  example. 
It  would  be  impossible,  without  ruinous  expense,  to  keep  up 
a  system  of  custom  collection  upon  the  border  line,  that  would 
effectually  prevent  so  light  and  costly  a  class  of  merchandise 
as  cotton  manufactures,  imported  under  the  free  trade  system, 
into  the  Southern  Confederacy,  from  penetrating  every  part 
of  the  North  and  North-west.  The  very  streets  of  Boston 
and  New-York  would  be  thronged  with  fabrics  purchased  in 
Charleston  and  New-Orleans.  It  is  not  difficult  to  foresee, 
that  in  an  incredibly  short  time,  the  whole  American  market, 
would  be  thrown  open  to  free  trade  with  the  world.  If  so, 
then  how  does  it  stand  with  the  planter,  who  may  still  have 
a  lurking  apprehension,  that  some  fractional  part  of  the  export 
tax  may  fall  on  him  ?  Grant,  for  the  argjument,  that  some 
part,  nay,  the  whole  of  it,  does  ;  what  effect  does  he  suppose 
such  an  expansion  of  a  market,  consisting  of  thirty-five  mil- 
lions of  the  best  consumers  in  the  Avorld,  accompHshed,  as  it 
only  can  be,  by  the  application  of  an  export  duty,  will  have 
upon  the  price  of  the  raw  material  ?  The  answer,  as  before 
shown,  is  expressed  in  the  ratio  between  two  and  twenty-four. 
The  effect  upon  the  value  of  the  raw  material,  must  be  just 
so  much  as  is  to  be  expected,  from  taking  off  twenty-two  dol- 
lars from  every  hundred, dollars  of  price  for  the  fabrics  in  so 
rich  and  populous  a  market.  "What  this  would  be  upon  the 
pound,  it  is  impossible  to  know  precisely.     It  must  be  left  to 


13 

those  most  conversant  with  the  subject,  to  say,  whether  it  is  not 
reasonably  certain,  that  it  would  at  least  restore  the  export 
"duty  thrice  over.  If  the  foregoing  views  be  not  delusive, 
then  it  is  certain  that  a  tariff  upon  the  cotton  exports,  is  not 
^lone,  the  only  tariff  that  can  be  devised,  practically  to  execute 
the  revenue  principle,  but  that  it  exhibits  a  feature  in  prac-      5^ .  ^ 


tice,  more  perfect  than  theory,  viz.,  a  method  of  taxing  con- 
sumption, without  curtailing  it. 

But  there  is  another  view  to  be  taken  of  the  question.  A 
system  of  finance  resting  upon  this  principle,  is  the  great 
lever  placed  in  our  hands,  by  the  natural  advantages  of  our 
situation,  whereby  at  this  critical  juncture,  we  may  lift  our 
national  existence  into  an  early  recognition  among  foreign 
powers,  and  acquire  at  once  the  importance  which  we  know 
belongs  to  us.  The  revolution  thus  suddenly  forced  upon  the 
-commerce  of  the  country,  would  do  more,  and  in  less  time,  than 
armies  and  navies,  to  bring  our  Northern  neighbors  to  a  just 
sense  of  the  relative  strength  of  the  two  Confederacies,  and 
teach  foreign  nations,  in  a  way  too  striking  to  be  ignored,  at 
which  end  of  the  old  Union,  they  will  find  their  assuidity  the 
most  amply  rewarded.  The  temporary  echpse  we  are  now 
suffering  in  the  eyes  of  Europe,  consequent  upon  the  recent 
dissolution,  will  soon  give  place  to  the  discovery,  that  not  we 
but  it  is  themselves,  that  are  under  the  shadow. 

It  is  not  my  purpose  to  descant,  upon  the  effects  such  a 
pohcy,  adopted  by  ourselves,  would  have  upon  Northern  in- 
terests. Believing,  that  so  long  as  peace  subsists,  every 
nation  is  interested  in  the  wealth  and  prosperity  of  every 
other  nation,  I  would  be  glad  to  perceive,  if  such  are  to  be  oui: 
relations,  a  more  hopeful  prospect  for  our  neighbors  than  I 
am  permitted  at  this  time  to  discover.  How  their  immense 
manufacturing  investments  are  to  flourish  under  free  trade  is 
a  problem.  This  much,  however,  I  certainly  know  :  they 
must  either  come  down  with  a  crash,  or  the  great  majority  of 
the  people  of  the  United  States,  have  for  forty  years  been 
swindled,  upon  a  scale  more  gigantic  than  the  South  Sea 
bubble  or  the  old  National  Bark.  We  are  further  permitted 
to  know,  that  with  the  repeal  of  import  duties  at  the  North, 
comes  the  only  other  method  in  their  power  of  raising  reve- 


^"^ 


14 

nue  —  direct  taxation.  And  if  -'guns  and  drums,"  and 
•"  brave  hosts  with  banners  flying/'  are  to  be  the  role  on  which 
they  mean,  now,  or  hereafter  to  enter,  the  supphes  for  the 
costly  pastime,  must  be  drawn  directly  from  their  lands  and 
goods.  At  this  expense,  we  have  been  taught  to  believe, 
Jonathan  ?ieyer  buys  his  whistle.  We  have  spent  our  national 
pupilage  at  school  with  him,  and  ought  to  know  something  of  his 
nature.  We  have  slept  with  him,  (in  our  own  bed,)  ate  with 
him,  (at  our  own  board,)  and  taken  many  a  thrashing  for  the 
mendicant  in  the  winding  up  of  a  scrape,  instigated  by  his  own 
rascality,  from  which  he  ever  contrived  to  escape.  Who  ever 
heard  of  ^  Solomon  swapping  a  Hawk  for  a  Hernshaw  ?  The 
taint  of  fanaticism  fetched  from  old  Barebones,  is  more  than 
qualified  by  a  sense  of  the  practical,  and  no  bigot  in  the  world 
is  less  likely  to  be  betrayed  into  the  thriftless  example  of  the 
honest  old  crusader,  of  selling  his  patrimony  for  Christ's  sake, 
to  equip  an  expedition  against  the  infidel. 

In  conclusion,  the  adoption  of  the  system  proposed,  w^ll  not 
only  save  half  the  expense  now  attending  the  collection  of 
the  customs,  but  will  obviate  the  vastly  greater  expense  that 
will  be  pecessary  in  our  new  situation,  to  protect  the  revenue 
against  ruinous  frauds.  The  alteration!  in  our  political  geo^ 
graphy  by  the  recent  dissolution  of  the  Union,  gives  to  the 
Southern  Confederacy  a  border  line,  extending  from  the  sea 
coast  to  the  Western  extremity  of  Texas,  upwards  of  one 
thousand  miles  in  extent.  It  is  palpable,  that  under  a  system 
of  import  duties,  all  articles  from  the  North  entering  into 
domestic  consumption,  now  constituting  a  very  large  pro- 
portion, would,  if  encountered  at  the  sea-ports  by  the  Custom 
House  officer,  attempt  to  find  their  way  to  the  market  across 
this  hne.  To  prevent  this,  it  would  be  necessary  to  establish 
along  its  whole  extent,  a  system  of  custom  houses  and  mili- 
tary stations,  the  expenses  of  which  would  devour  another 
revenue,  in  raising  one  for  the  government.  And  after  every 
precaution,  it  has  been  the  experience  of  the  world  that 
frauds,  to  a  greater  or  less  extent,  would  be  successful.  In 
situations  much  less  favorable  to  smuggling,  and  much  better 
guarded  by  nature  and  administrative  appliances  than  ours 
can  ever  be,  it  has  been  found  that  ingenuity  and  daring, 
actuated  by  cupidity,  will  ever  devise  means  to  elude  the 


15 

vigilauce  of  the  government.  Among  a  people  like  ours,- 
unused  to  such  institutions,  and  educated  to  regard  them  as 
the  symbols  of  despotism,  the  attempt  to  enforce  the  law,- 
necessarily  severe  as  it  must  be,  against  smuggling,  would 
lead  to  insurrection  and  blood-shed  on  both  sides  of  the  line,- 
and  finally,  in  all  probability,  terminate  in  war  with  our 
neighbors.  But  after  every  precaution  taken,  and  all  the 
risksincurred,  it  would  be  rendered  impossible,  by  geographical 
obstacles,  the  sameness  in  the  language,  and  physical  features 
of  the  people,  and  their  singularly  adventurous  character,  to 
protect  the  revenue  from  ruinous  frauds.  And  what  would 
be  the  effect  upon  the  character  of  our  people,  and  the  em- 
poriums of  trade  in  the  Southern  Confederacy,  of  illicit  traffic, 
systematically  carried  on,  to  any  extent  in  the  interior  ?  It 
would  demoralise  the  national  character,  beget  a  habit  of 
disloyalty,  and  secret  hostility  to  tlie  civil  authorities,  intro- 
duce a  spirit  of  lawlessness,  and  reckless  contempt  of  law  and 
morality,  that  would  soon  terminate  in  a  general  and  open 
defiance  of  the  government,  and  a  relaxation  of  all  the  bonds  of 
organised  society.  The  cities  would  languish  in  their  trade, 
recede  in  activity  and  wealth,  and  be  depopulated  ;  and  busi- 
ness in  all  legitimate  employments,  be  visited  with  distress  and 
bankruptcy.  Such  would  be  the  inevitable  consequences  of 
an  attempt  by  the  government  of  the  Southern  Confederacy,- 
to  levy  the  public  revenue  upon  the  principle  of  duties  upon 
foreign  imports,  unless  indeed,  we  mean  to  put  the  North,  on 
the  privileged  footing,  of  free  trade  in  commercial  intercourse.- 
But  this  Cannot  be  done,  without  sacrificing  much  the  largest 
part  of  the  revenue.  If,  then,  nothing  else  in  the  foregoing 
views  were  correct,  except  this  that  relates  to  the  point  of 
smuggling,  it  would  seem  to  be  practically  futile,  to  attempt  to' 
raise  the  public  revenue,  by  any  system  of  duties  on  imports.- 
It  follows,  that  as  revenue  must  be  had,  some  other  method 
must  be  resorted  to.  There  is  no  choice  but  between  direct 
taxation  and  an  export  duty.  And  though  I  am  not  one  of 
those  who  scout  direct  taxation,  when  compared  in  its  merits 
with  the  system  of  import  tariffs.  I  am  yet  fully  persuaded, 
taking  the  views  hitherto  expressed  of  the  wonderful  econ- 
omy of  the  principle  of  export  duties,  its  adaptation  to-  the 


16 

circumstances  and  situation  of  the  Southern  Confeclerac)^. 
and  the  ability  of  the  revenue,  raised  upon  this  principle,  to 
protect  itself  without  the  aid  of  armies  or  custom  houses,  that 
it  is,  and  always  must  be,  the  great  policy  of  the  South.  In- 
deed, I  regard  its  speedy  adoption  by  the  administration  at 
Montgomery,  as  urgently  demanded,  in  the  still  dubious  rela- 
tions of  the  country,  if  we  mean  to  maintain  in  good  faith^. 
and  with  a  resolute  will,  our  separate  existence  as  an  inde- 
pendent  nation. 

CORRECTION. 

Estimates  received  through  a  House  of  character  and  intelligence 
liere,  from  tl»e  best  sources  in  New  York,  in  connexion  with  informa- 
tion derived  from  statistical  documents,  consulted  since  the  publication 
of  the  foregoing  pages,  reduce  the  consumption  of  cotton  fabrics,  in 
the  Slates  now  constituting  the  Southern  Confederacy,  from  one  hun- 
dred to  fifty  millions  annually.  The  effect  of  this,  if  the  reasoning  of 
the  pamphlet  be  just,  is  manifestly  a  corresponding  reduction  in  the 
proportion  of  the  revenue  drawn  from  our  own  citizens,  making  it  one 
million  instead  of  two,  thus  throwing  nineteen-twentieths  of  the  support 
of  government  upon  foreigners* 


NOTE    1. 

It  will  be  perceived  that  the  plan,  as  delineated  in  the  foregoing  ■png'e^ 
does  not  contemplate  a  repeal  of  any  class  of  import  duties,  other  thao 
those  upon  cotton  fabrics.  This  limitation,  is  not  because  the  writer  is' 
not  in  favour  of  the  importation  of  all  articles  of  consumption,  duty 
free.  But  no  further  encroachment  upon  the  existing  system  wa& 
necessary  to  exhibit  the  practical  working  of  the  scheme  proposed,  as  sn 
system  of  finance,  (to  its  best  advantage.)  Without  any  repeal,  however,. 
the  method  proposed,  would  be  in6nitely  more  economical  than  the 
present  system.  All  other  duties  are  left  untouched,  for  the  wisdom  of 
the  occasion,  either  to  repeal  or  continue  upon  a  reduced  scale,  in  aid 
of  that  derived  from  the  export  duty.  It  is  manifest,  that  a  very  low 
scale  would  furnish  any  deficit  now  or  hereafter. 


ADDENDUM. 


Since  sending  tlie  foregoing  to  press,  Mr.  Lincoln's  inaugu- 
ral has  appeared,  and  calls  up  another  consideration  connected 
with  this  subject.  Its  tone  and  implication  seem  to  look  to 
coercion,  in  a  way  that  sliall  not,  in  his  estimation,  according 
to  the  standards  of  his  nurture,  bring  on,  or  justify  resistance 
by  bloodshed.  It  would  seem,  therefore,  to  contemplate  the 
collection  of  the  revenue  on  the  bar,  in  armed  vessels,  if  any 
significance  is  to  be  attached  to  the  twaddle,  about  his  unwil- 
lingness to  thrust  upon  the  community  Federal  officers,  obnox- 
ious to  its  prejudices.  How  effectually  does  the  export  duty 
baffle  the  impotence  of  any  such  attempt !  The  duty  having 
been  collected,  and  paid  into  the  Treasury,  and  the  property 
passed  into  foreign  hands  before  taking  the  water,  all  the 
navies  in  Christendom,  stationed  at  the  bar,  could  not  defeat 
the  government  of  its  revenue ;  and  the  worst  that  could 
befall,  in  a  pecuniary  estimate,  if  the  duties  on  imports  should 
for  a  time  be  successfully  enforced,  would  be  to  elevate  the 
price  in  the  domestic  market,  two  per  ce:it  upon  all  articles  of 
strictly  foreign  import,  (their  own  principles,  exempting 
of  course  their  own  manufactures,)  not  constituting  one-third 
of  the  domestic  consumption.  The  result  would  be  a  tax  of 
twenty-six  instead  of  the  existing  twenty-four  per  cent  upon 
one-third  of  the  consumptionof  the  Southern  Confederacy. 

So  small  an  enhancement  of  cotton  fabrics  in  the  markets 
of  the  Confederacy,  shifting  itself,  as  before  shown,  upon  the 
varieties  of  luxury,  would  occasion  little  distress  or  inconve- 
nience to  the  citizen,  and  if  persisted  in,  as  a  system  of 
passive  warfare,  would  prove  itself  vastl}^  more  expensive  to 
its  managers,  and  provocative  of  disputes  with  foreign 
powers,  than  effectual  for  any  purpose  of  coercing  the  sover- 


eign  will  of  the  Confedei'acy.  Such  a  state  of  things,  if 
existing  for  any  time,  would  afford  a  striking  illustration  of 
the  advantages  of  the  principle  of  export  duties,  viewed  as  a 
system  of  finance,  adapted  to  the  exigencies  of  war.  The 
government  could  supply  itself  with  an  abundant  revenue, 
impossible  to  be  intercepted  by  the  enemy,  and  the  people 
sustain  themselves,  without  sensible  injury,  under  a  confisca- 
tion of  twenty-four  per  cent  of  the  value  of  all  foreign  imports 
entering  into  their  consumption. 

The  only  alternative  then  left  to  Mr.  Lincoln,  if  he  persist 
in  coercion,  would  be  to  abolish  all  ports  of  entry,  and  lay  an 
embargo  upon  the  commerce  of  the  Southern  Confederacy  ; 
and  in  deference  to  the  recent  growl  of  the  British  Lion, 
about  paper  blockades,  as  well  as  the  undoubted  principles 
of  the  law  of  nations,  it  must  be  supported  by  a  naval  force, 
adequate  to  maintain  it  upon  the  strictest  principles  of  the 
law  of  projectiles.  But  is  it  conceivable  that  England  would, 
or  could  long  submit,  to  such  an  interruption  of  her  com- 
merce ?  By  a  great  effort  of  self-denial,  not  foreseing  at  what 
moment,  the  growing  power  of  France,  may  drive  her  for 
shelter,  to  the  protecting  maxims  of  a  code,  which  she  has 
seldom  hesitated,  under  tlie  temptations  of  interest,  to  violate 
in  her  intercourse  with  weaker  powers  :  under  this  constraint, 
I  say,  England  might,  for  a  time,  dispense  with  the  South 
as  a  market  of  consumption  for  her  manufactures.  But  how 
long  will  she  submit  to  the  imposition  of  an  embargo,  cutting 
her  off  from  the  only  market  in  the  world  for  the  purchase  of 
her  cotton  supplies  ?  She  would  be  false  to  her  history,  aye, 
and  to  the  last  and  highest  law  of  nations  too,  if  the  tomfoolery 
of  Mr.  Lincoln  and  his  Cabinet,  under  the  silly  pretext  of 
the  chapter  in  the  law  of  nations,  treating  of  the  rights  of  the 
Sovereign  to  reduce  his  revolted  provinces  were  not  whistled 
down  the  wind,  and  the  government  at  Washington,  gently,  but 
significantly,  informed  by  Minister  Lyons,  that  Grotius  and 
Puifendord  invented  their  maxims  before  the  era  of  cotton,  and 
that  the  revolted  provinces,  attempted  fo  be  appropriated,  are 
like  the  sea,  the  air,  the  light  of  heaven,  the  common  property 
of  mankind,  from  which  no  one  proprietor  can  or  shall  exclude 


19 

another.  That  though  the  word  cotton,  is  not  to  be  found  in 
the  writings  of  those  venerable  sages,  jet  that  the  principle 
governing  the  question,  is  written  in  characters  of  light  in 
every  part  of  them.  That  the  exclusion  from  cotton  would 
threaten  the  stabihty  of  half  the  thrones  in  Europe,  and  that 
nature  and  nations  declare  that  necessity  is  the  highest  law. 

CENT-A-POUND. 


